Friday, May 6, 2011

Is The High End Market In L.A. Looking Up?

The relatively small cadre of S-Class Mercedes driving property purveyors in Los Angeles, CA who ply their trade in the priciest zip codes and handle the real estate doings of the super rich have reason to celebrate this spring. It appears, children and Chicken Littles, that despite the continuing economic difficulties faced by not-rich folks–how is a person who makes minimum wage supposed to pay for five dollar a gallon gas?–the wildly- and still-wealthy in Los Angeles have started to throw their mega-millions around with renewed vigor on sumptuous, shockingly expensive, and high-maintenance estates where it costs more to keep the hedges clipped and lawns watered each month than most people make in a month.

Sure, there have been any number of large sales at the tippy top of the market in Los Angeles over the last few years including the $50,000,000 sale–or some say "sale"–of Mohamed Hadid's Bel Air mega-mansion in 2010. In July 2009 a newly built house in Bel Air sold for $26,500,000, in July 2010 a mansion in Beverly Hills sold for $29,816,500 and airplane leasing mogul Lou Gonda sold his Bev Hills house in December for $23,000,000. Howevuh, darlins, according to Your Mama's entirely unscientific research and assessment, high priced sales have picked up considerable momentum the last few months.

Former über-agent turned high-end house flipper Sandy Gallin sold his gut renovated and expanded 1937 mansion in Bel Air–originally designed by Paul Williams–for $23,000,000 in early March 2011. In late March, in the same gated community in Brentwood where Arnold Schwarzenegger and Maria Shriver live and where supermodel Gisele Bündchen and her pigskin tossing hubby Tom Brady are building a 20,000 square foot "green" behemoth, a recently completeted 5-acre estate with an 18,000 square foot mansion sold for $26,000,000.

In mid-April 2011 heiress, art world maven and Russian oligarch Roman Abramovich's baby momma Dasha Zhukova sold a faux-Tuscan mansion at the crown of the Bird Streets above Sunset Boulevard for $19,500,000, even though her mouthpiece emphatically told Your Mama it was not for sale. Quick on the heels of Miss Zhukova's transaction came the $23,000,000 sale of tech titan turned philanthropist David Bohnett's gigantic house in the flats of Beverly Hills.

Then, late last week word came fast and furious down the real estate gossip grapevine that financial services widow, art collector and philanthropist Iris Cantor finally managed to unload her palatial real estate white elephant for $40,000,000. According Our Fairy Godmother in the Holmby Hills and confirmed by two additional trusted informants, the approximately 35,000 square foot beast was purchased–in cash–by a Goldman Sachs bigwig named Gene Sykes who back in the early 2000s, according to an article about him from then, was already earning upwards of ten million clams per year.

This week, one more $20,000,000-plus big deal went down in Tinseltown between two notable Angelenos. More on that to come.

Only time will tell if the super rich will keep on buying mega-mansions and sick-expensive estates lickety-split or if this seeming uptick in the frequency high-end sales in the fancier L.A. zip codes is merely an anomaly in an otherwise still squeezed and in some cases austere real estate market. We shall see, sugar sticks, we shall see.

Trust me, real estate is back. You have a lot of people that spent the last few years sitting on their hands and they are tired. They and their wives want new homes and they want them now.

Meanwhile, it can be amazing how much money you can save up when you have spent nothing for two to three years. Hell, I am drawing up plans for something big. After a point you realize that you have one life to live and you may as well enjoy it and live it up because who knows what is in store for tomorrow.

I don't think it'll make much difference either way Mama. I always discount what the uber-rich do anyways. They aren't getting any younger while the economy sputters and have money to burn, so why not.

While the real estate excesses of the super rich are rather entertaining to the masses (like the semi-starving Spanish peasants who used to go to watch the nobility eat in public) it also screams out for a far more progressive tax system. One might recall that in the 1930s, 40s and 50s the top rate was 90%. I'd bring that back pronto. It did us no harm then and would do us lots of good now.

The $23M sale of the Gonda house on Lexington Road included, are you ready for this, fellow children, the furnishings. The buyer, said to be from the Far East, wanted everything, including the silverware! The buyer didn't get the flatware, or the gorgeous crystal chandelier in the foyer. This house was really decorated beautifully, in my meaningless opinion.